Micron (MU) Drops While SolarCity (SCTY) Ascends

Jacob Harper |

It was the best of times and worst of times for two semiconductor companies on Oct 11, as Micron Technology, Inc. (MU) shares fell while SolarCity Corp’s (SCTY) rose.

Leading semiconductor manufacturer Micron Technologies released their fourth quarter and fiscal year earnings report on Oct 11 and they largely proved the bulls right, yet the company dropped in share price. On the same day, green semiconductor manufacturer SolarCity said they expect installation to increase 90 percent in 2014 and the company’s shares skyrocketed.

Micron Earnings Confusion Tempers a Bullish Year

Micron has long been an unprofitable company but is a favorite of Wall Street for its supposedly rosy future. After the successful, profitable acquisition of Japanese chipmaker Elpida Memory Inc., the company proved the bulls right, beating analyst estimates.

However, conflicting reports on Micron’s actual EPS seemed to confuse investors, as the earnings beat was quizzically met with a sell-off and drop in the company’s shares.

Micron has been a major success story this year, gaining both a reputation as one of the hottest tech stocks on the market and 177 percent on the year.

For their fourth quarter 2013 earnings report, Micron reported a net profit of $1.71 billion, or $0.29 per share, versus the net loss of $248 million, or -$0.24 per share, from the same period a year ago. Revenue for the quarter was $2.84 billion, as compared to $1.96  billion from the previous year. Analysts were expecting a net gain of $0.23 per share on revenues of $2.71 billion.

Following the earnings beat, shares of Micron dropped 7.98 percent to hit $16.93 amid heavy trading.

SolarCity Rises on Sunny Projections

The solar panel installation manufacturer SolarCity meanwhile announced that they expected installations to nearly double in 2014, as demand for green technology surges. The company is aiming to have one million installations completed in the next five years.

SolarCity began as the brainchild of Tesla Motors (TSLA) CEO Elon Musk, who still serves as the Chairman of the company. Like Tesla, SolarCity has been one of the most hyped tech stocks in 2013, and has more than tripled in value this year.

Investors expect leasing to spur the company as more and more solar panels are installed, ensuring a steady stream of revenue into SolarCity’s coffers. S&P Capital IQ analyst Angelo Zino sees home installations driving revenue, with the company’s high growth to come “from the residential side, (rather) than the large scale projects.”

The company’s shares rose over 22 percent to take the stock just short of $47. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
TSLA Tesla Motors Inc. 192.18 -0.11 -0.06 2,722,505
SCTY SolarCity Corporation n/a n/a n/a 0
MU Micron Technology Inc. 20.50 -0.16 -0.77 23,977,968
EUYNF Eu Yan Sang Intl Ltd Ord 0.43 0.00 0.00 0

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